A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

Search form

SSDI: Time for Reform

The just-released Social Security Trustees’ annual report projects that Social Security’s Disability Insurance (SSDI) component will become insolvent sometime during 2016 — leaving not much time for reform deliberations. Recent instances of SSDI fraud have concentrated the minds of lawmakers in Congress. Beyond combating SSDI fraud, however, Congress can use this opportunity to adopt sensible SSDI reforms to improve the lives of individuals with disabilities.

Evidence of behind-the-scene activity on Capitol Hill on SSDI reforms is beginning to emerge. Based on recent Congressional hearings, lawmakers appear highly dissatisfied with how the SSDI program is working. Many are focused on combating SSDI fraud but appear reluctant to adopt more comprehensive reforms.

A few facts on SSDI:

Beneficiaries currently number 11 million and the system admits about 1 million new beneficiaries into the program each year. Current annual SSDI expenditures run at $140 billion. Most significantly, enrollments have consistently exceeded the agency’s projections during the last several years, suggesting strong incentives among those with medical impairments to quit work and apply for SSDI benefits.

SSDI applicants must provide evidence of a medical impairment that prevents work above the Substantial Gainful Activity (SGA) level of earnings — currently $1,070 per month — one that is expected to last for at least 12 months or result in death. This condition means a decision to apply for SSDI compels exit from the work-force.

“Evidence from the last several recession episodes shows that such enrollment surges were not reversed during the last three recessions once the economy recovered and unemployment abated.”

The existence of a qualifying medical impairment is judged according to “medical listings” — severity of medical conditions that applicants must “meet or equal.” Failing that, applicants may still be admitted to the program for demographic and vocational reasons such as age, education, job skills, job availability in the applicant’s occupation or other occupations, and so on. These criteria induce SSDI applications and allowances to accelerate during recessions.

Evidence from the last several recession episodes shows that such enrollment surges were not reversed during the last three recessions once the economy recovered and unemployment abated. This despite no increase in the population’s share of those with medical impairments, improved technology in assistive devices, and an improved legal environment for accommodating those with medical impairments in the workplace.

Once allowed onto the program, many beneficiaries are reluctant to return to work for fear of losing SSDI’s cash benefits and eligibility to low-cost Medicare coverage — trapping those with residual work capacities and those who could adapt to their impairments and resume work into a state of government dependency.

The majority of applications are professionally represented and representatives appear to be increasingly adept at exploiting SSDI’s procedural nuances to increase allowance success rates. State and local governments have also increased efforts to enroll into SSDI those dependent on state welfare programs to reduce or offset state budget expenditures.

Moreover, recent widely reported incidents of fraud by applicant representatives, ALJs, and medical practitioners have heightened suspicions that those were not isolated incidents. Fraud in combination with shortcomings in SSDI’s disability determination procedures may explain a large portion of the secular surge in SSDI enrollments. According to Sen. Tom Coburn’s (R-Okla.) investigations into SSDI allowance patterns: “What we found is 25% of the cases should never have been approved for benefits based on Social Security’s own rules and procedures. So, we had 25% where their own administrating law agents didn’t follow their own rules.”

As positive as these steps are, Congress needs to go further. Evidence accumulated since the early 1980s indicates increasing uncertainty and difficulty in making disability determinations — because of improving population health, better technology, greater legal recourse when competing for jobs, better access to public amenities, and improved social attitudes favoring independence, self-determination, and community participation by individuals with disabilities.

Failure by Congress to adopt workable programmatic reforms to SSDI to more strongly encourage return to work by beneficiaries and to assist workers to remain employed despite health obstacles would be a tragic missed opportunity.